25th Nov 2022 09:11
(Alliance News) - Sequoia Economic Infrastructure Income Fund Ltd on Friday reported a half-yearly fall in net asset value and share price, due to higher interest rates.
The FTSE 250-listed London-based income fund reported a net asset value per share of 93.64 pence as at September 30, down 6.8% versus 100.50 pence as at March 31.
The company's share price as at September 30 amounted to 81.90p, reflecting a decrease of 20% from 102.80p as at March 31.
Sequoia attributed these declines to increasing interest rates, as well as credit spreads.
"It is important to stress that this is an unrealised loss that will naturally reverse itself over time," the company noted.
Sequoia recorded a net asset value total return of negative 3.8% in the period, reflecting higher discount rates applied to its portfolio assets which are expected to "accrete back to par as loans approach their repayment dates."
The fund lifted its dividend target by 0.625p to 6.875p per year. This increase will be reflected in its next quarterly dividend payment, which will amount to 1.71875p per share.
Looking ahead, Sequoia expects weak economic conditions to persist.
"The company has continued to demonstrate its resilience against a backdrop of considerable uncertainty and market volatility, driven by macroeconomic and geopolitical challenges. The underlying performance of our investment portfolio has been robust and once again we have outperformed the wider credit markets. The era of ultra-low interest rates is ending. Combined with the resilient performance of our portfolio, this makes it appropriate and timely to increase our target dividend by ten per cent," Chair Robert Jennings commented.
Share in Sequoia Economic Infrastructure Income Fund were down 0.3% at 89.75 pence on Friday morning in London.
By Abby Amoakuh; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.